Lord Reid.:-

The appellants in this case were, during the material time, partners of the firm of Rai Bahadur Bansilal Abirchand which carried on business both within British India and elsewhere. Each appellant had a quarter share in the firm. The firm was a registered firm resident in British India within the meaning of the Indian Income-tax Act. The first appellant was not ordinarily resident and the second appellant was not resident in British India within the meaning of that Act. A considerable part of the firm's income arose or accrued outside British India and was not brought into or received in British India. The question in the present case shortly stated is whether the appellants are bound to include in their total incomes for the purpose of Indian income-tax the whole of their shares of the firm's income or whether they are entitled to exclude a proportion of those shares corresponding to the proportion of the firm's income which arose or accrued outside British India.

[2] The appellants were assessed to income, tax for the year 1939-40 by the Income-tax Officer, Nagpur, in amounts which included the whole of their shares of the firm's income for the previous year. They appe